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Why didn't they include it since it was so good and funny? Why Norway? Why changing?
Well, according to my opinion and knowledge about the movie and characters...
Before starting, let's compare the scenes.
First the sequence that made into the movie.
Now the deleted scene.
It wasn’t fine because of a few “plot holes”.
First of all, every single scene of the movie VEEEERY likely had MANY versions. In the end, they choose the ones they liked the most and that contained the less plot holes possible, assembling the pieces together and making it official.
You see, in this version, Odin was a beggar in New York, it explains the map etc.
HOWEVER, I believe the producers said they wanted a MORE NOBLE ending for Odin (and a strong flashback scene later on, when Odin talks to Thor), so Odin, instead of being a beggar became “normal Odin” resting in Norway.
Also, a few of the reasons I think they removed the scene was that the idea of Stephen and Loki interacting and FALLING FOR 30 MINUTES! was a lot funnier than Loki being locked inside a bathroom.
I LOVED THE DIALOGUE between Stephen and Thor and I think they should have kept that. It shows how Stephen isn’t the cold, mysterious guy many think he is, but that actually he’s just…difficult when it comes to expressing what he really feels and what his intentions really are. Doctor Strange at this point already suffered so much that he’s incapable of faking a smile or saying something he doesn’t mean, that makes him 100% sincere and realistic: if you asked him “how do I look” and he honestly thought you looked awful, he would say it on your face. It doesn’t mean he would be mocking you or wanting to make your feel bad, he would just be telling you the truth because he believes it’s the best way, and it indeed IS because if he lied telling you looked great, you would go out looking awful and that would be the exact opposite of what you wanted.
Now, plot holes that might have convinced the director/producers to change:
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Why give Thor a map if he can open a portal and take Odin straight to his objective?
The idea of the map was great, the idea of the key was great, THE ENTIRE IDEA WAS GREAT AND I LOVED IT, but we must remember Doctor Strange wants to help and will do his best, soooo he would open a portal and leave Thor in the exact place Thor asked. Stephen is objective, practical and clear, so it’s 100% in character for him to use a portal instead of giving Thor directions only.
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Odin is a “Mystic Being”.

I don’t think Doctor Strange would just overlook Odin if he became a lost crazy beggar walking around New York. Odin is a Mystic Being and one of Doctor Strange’s duties is to keep an eye on Mystic Beings, guarantee they offer no harm to people and of course, make sure they’re adapting to Earth, if they decide to live in our planet, so Doctor Strange totally WOULDN’T NEGLECT ODIN. In the official scene, we can SAFELY ASSUME Doctor Strange contacted Odin and asked what he needed. Odin said he wanted to stay in Norway (or…just…calming place, somewhere he could rest, die in peace). We can assume Stephen helped Odin to go to Norway and provided a home and food so the elder god could have his calm, peaceful rest until Thor and Loki came to him. Stephen isn’t evil and if he can help someone with almost zero effort, he WILL help the person.
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Loki and Strange
They probably thought “we need to show the audience Doctor Strange grew, that he matured and that he isn’t just an apprentice anymore” because Stephen will have an important role in Infinity war and he isn’t there just for show, he apparently will have a very important participation and we already know he will be teaming Tony Stark as an EQUAL during battles, alongside Spider-man (who still is Tony’s young precious baby, and now also Doctor Strange’s precious baby). Soooo, was there a better way to show us that Stephen got SUPER STRONG in less than 6 minutes then creating a quick confrontation against Loki? I don’t think so. That puts Loki and Stephen in the same scene, give us a notion of how Strong Stephen became and….IT’S FUNNY!
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Aesthetic

It’s a lot more beautiful to see Norway’s green fields and Loki falling inside the Sanctum that bathrooms and New York alleys. Simple as that. Also, a "better" way to say goodbye to such a relevant character in Thor's storyline. -
Wait, is Doctor Strange stronger than Loki?

Not per se! In all the comic battles so far, Stephen and Loki have shown equal/very similar firepower, Stephen even a bit stronger than Loki considering he is as strong as the god he summons, but there’s a very important factor: Doctor Strange is canonically more INTELLIGENT. Defeating Loki with the portals was INTELLIGENCE, not RAW POWER. I would love to see a sorcerer battle of Loki X Strange, and we must remember that if Strange takes just 1 hit from Loki, he dies. He would most likely die, while Loki could take many many hits and still have zero scratches on him.
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The Strange and Thor’s dialogue

I loved it and I wish they had kept it. Instead of Thor leaving, they could have added the “Loki falling for 30 minutes” part and then moved on.I guess they cut it out because of time. It’s always because of time. I really see no other reason for that amazing chat being deleted from the movie. It shows us that Stephen can sense someone’s fate just by touching them, feeling the many possibilities fate prepared for them, it shows us Stephen can make these magic tricks, it shows Stephen CAN’T LIFT THE MJOLNIR AND HE KNOWS IT therefore, Stephen doesn’t consider himself worthy. It also shows how Stephen is less cold and serious than he looks because he refers to himself as “this wizard”, he’s not being cocky, it shows how Stephen is TRYING TO BE NICE despite all he has are bad predictions, it shows Stephen LIKED Thor and probably hinted a future interaction between them in Infinity War, it shows how Stephen CARES about Thor, he’s clearly worried and feeling sorry for him.

